State Appeals Ruling on Disability Funding

In May, a federal judge issued an injunction to halt the state’s freeze on funding for programs for the developmentally disabled.

Yesterday, California attorneys were back in court, this time at the 9th Circuit U.S. Court of Appeals in Pasadena, to ask that the May decision be overturned.

Craig Cannizzo, who argued the case on behalf of individuals with developmental disabilities, said this case has far-reaching implications because the state did not get permission from CMS for the rate freeze.

“This is extraordinarily important,” Cannizzo said. “For instance, the recent 2011-2012 budget cuts had a provision in them to get approval from the feds. But if the court rules that they don’t have to get that approval in this case, the [Department of Health Care Services] might use that caveat in future budgets, and it would render the CMS largely impotent.”

At that point, Cannizzo said, the only recourse for CMS would be to withdraw all funding from California — “and that would be like curing the illness by putting the patient out of their misery and killing them,” Cannizzo said. “It wouldn’t make sense.”

Cannizzo said justices on the three-judge panel accused the state of end-running the system.

DHCS officials have a policy of not commenting on active court cases.

The judges are not expected to rule for months, Cannizzo said. If judges side with the advocates for the disabled, the ruling could come earlier, Cannizzo said.

The preliminary injunction was stayed, pending yesterday’s hearing, so if the judges buy into the notion that there may be irreparable harm from the rate freeze, then it’s incumbent on them to rule more quickly, Cannizzo said.